Wednesday, March 14, 2018

Elizabeth Holmes, founder and chief executive of the blood-testing company Theranos, has been charged by the Securities and Exchange Commission with an “elaborate, years-long fraud” in which she and former company president Ramesh “Sunny” Balwani “allegedly deceived investors into believing that its key product — a portable blood analyzer — could conduct comprehensive blood tests from finger drops of blood,” the SEC said Wednesday, reportsThe Washington Post.

Theranos and Holmes have agreed to resolve the charges against them but have not admitted or denied the allegations. Holmes is ceding her voting control of the company and reducing her equity stake in Theranos.

Get this, the SEC also alleges that Theranos, Holmes and Balwani falsely claimed that their products were being used by the Department of Defense on the battlefield in Afghanistan and on medevac helicopters. That technology was never used by the Department of Defense, even though Gen. Jim Mattis, who then led the U.S. Central Command, personally pushed for it to be used in the field. Regulatory officials in the military flagged problems with Theranos's blood-testing process. Mattis later joined Theranos's board. He resigned from that position when he became U.S. defense secretary.